Commonwealth Fund Study Based on Flawed Methodology

WASHINGTON, Sept. 14 /PRNewswire/ -- Consumers seeking health insurance in the individual market find more choices, broader benefits and greater affordability than is widely known. Moreover, the vast majority of consumers who apply for coverage in the individual insurance market are approved without restrictions, and the benefits commonly purchased by consumers provide substantial financial protection.

These are among the key findings from a survey conducted last year by America's Health Insurance Plans (AHIP). Based on detailed benefits data from AHIP member companies that are active in the individual market, the AHIP survey reflects the experiences of 1.9 million policyholders and 3.2 million covered lives. It is the most comprehensive study of the individual market undertaken to date.

By contrast, a study released today by the Commonwealth Fund characterizes the individual market based on a telephone survey that includes just 137 people who currently have coverage purchased through the individual market.

The Commonwealth report also claims that "most adults who seek to purchase insurance coverage through the individual market never end up buying a plan, finding it either very difficult or impossible to find one that met their needs or is affordable." However, those defined as "seeking" coverage include any respondent who "ever thought about" buying individual coverage in the past three years.

AHIP's member survey, however, is based on the experiences of several million consumers who actually did seek coverage in the individual market, and it found that even in states that allow insurers to consider an applicant's medical history, nearly nine out of ten people who completed the application process for non-group insurance were offered coverage.

"The data could not be clearer: coverage purchased in the individual market is accessible and affordable," said AHIP President Karen Ignagni.

AHIP's survey, Individual Health Insurance: A Comprehensive Survey of Affordability, Access, and Benefits, was released in August 2005 and found that:

• The "typical" policy purchased by consumers in the individual health insurance market is a preferred provider organization plan with an annual deductible close to $2,000, annual out-of-pocket limits of about $4,000 and a lifetime maximum benefit of nearly $5 million.

• In 2004, the annual premium for single coverage averaged $2,268 and the average annual premium for family coverage was $4,424. By comparison, annual premiums for employer-sponsored health plans during 2004 averaged $3,696 for single coverage and $9,948 for family coverage.

• More than 90% of the single policies surveyed were sold in states where the average premium was under $3,000, and 98% of family policies in the survey were sold in states where the average premium was under $6,000.

• Nearly every plan in the market offered -- and most people purchased -- a prescription drug benefit, coverage for inpatient and outpatient mental health treatment, coverage for inpatient and outpatient substance abuse, annual visits to an obstetrician/gynecologist, well-baby care, and for complications of pregnancy.

• Of those applicants offered coverage in the individual market, more than three-quarters received their requested coverage at standard rates, while 22 percent were offered full coverage at higher initial premiums. Only 1 percent of offers included a coverage exception for a specified condition.

For more information, please view Individual Health Insurance: A Comprehensive Survey of Affordability, Access, and Benefits.